Something for nothing: In this kind of economy, those are powerful words, and I was reminded this weekend of one of the companies in the online video space, Hulu, whose something-for-nothing business has steadily gained notice.
First, in what may have been a tease for his next book, but was still a pretty complete argument, "long-tail" guru Chris Anderson had a story in the weekend edition of The Wall Street Journal about the evolution of free content business models. That got me thinking about Hulu, which according to our sibling publication, FierceOnlineVideo, has been rocking the Internet video world, but whose progress still may not be all too apparent to telco TV providers.
Then, on Super Bowl Sunday, in a fourth-quarter commercial that I would have easily missed had the game itself not been so compelling, Alec Baldwin/Jack Donaghy touted Hulu in a cheeky TV commercial about turning online video viewers' brains into mush. Hulu counts Super Bowl broadcaster NBC as a major investor, and reportedly did not have to pay for the commercial (a lot of something, possibly for nothing). In any case, the face time in front of 90 million or so Super Bowl viewers is likely to do wonders for common consumer awareness of Hulu's easy approach to watching a bunch of video content online for free.
When Hulu launched it may have been seen as one of many attempts by new firms to chase the coattails of YouTube. It certainly was not seen as a venture that would have a near-term impact on telco TV services, but it might be time to re-evaluate that opinion. At recent industry trade shows such a CES 2009, TelcoTV 2008 and NXTcomm 2008, it was easy to get the impression that the telco sector's understanding of the online video influence and threat was fairly limited to YouTube. The "YouTube effect" has been like a shorthand reference for all that Internet-based video venues might offer to (or against) telco TV providers.
But, in recent months, Hulu has been growing rapidly and perhaps more impressively, has been generating great appeal among mass advertisers to support its offerings. Access to content on Hulu is simple and unfettered, and as TV manufacturers begin to work more with content firms on direct streaming services, Hulu likely will become a favored target. That could increase the threat that Hulu holds for telco TV providers if they don't take the company seriously. Now is the time for them to consider how to make Hulu part of their evolving video offerings. Perhaps Hulu did not have to pay for its Super Bowl Sunday attention, but attention is what it got, and attention is what should now be paid by telcos.
- FierceOnlineVideo has more on Hulu's Super "secret"
- The Wall Street Journal has this story
Hulu has been steadily gaining video streamers
NBC Universal jilted iTunes for Hulu in 2007